Delay in Saudi Labour Market Crackdown Welcomed by Some

After two months of paperwork, and thousands of riyals (more than $1,000) in payoffs to corrupt Saudi middlemen, 26-year-old Bangladeshi electrician Kamal Hussein finally was seeing daylight Wednesday at the end of his long journey through an epic attempt by Saudi Arabia to regularize its vast foreign labor market.

If all 9 million of the foreign workers in Saudi Arabia heed the government’s warnings to obtain fully legal work visas and permits, or leave the kingdom, those foreign workers remaining will have real legal footing in the country for the first time, as authorities argue, Hussein said. He spoke outside the Bangladeshi embassy, where he and dozens of others stood waiting in the shade cast by a building for the last bits of documentation needed.

“If we are able to get the right papers, maybe we don’t have to keep paying” kickbacks to black-market job- and permit-brokers in the kingdom, Hussein said.

“No, the government is very strong right now,” Hussein insisted, when other Bangladeshi workers around him scoffed at the thought of an end to payoffs to the kingdom’s job-brokers.

Wednesday was to have been the government deadline to foreign workers – who make up half the country’s workforce, according to Human Rights Watch – to bring their work papers in line with government regulations.

However, King Abdullah bin Abdulaziz al Saud this week extended the deadline for four months, until November. The postponement, the second granted by the king in this year’s labor crackdown, was welcomed by countless who still are trying to finish this summer’s paper chase for the right stamps and paperwork.

The crackdown on improperly documented workers has made long lines outside embassies and government offices a routine fixture of this summer. Millions among the foreign labor force have worked without proper visas or work permits, leaving them vulnerable to Saudi brokers who take hundreds or thousands of dollars annually to give them black-market papers for the labor market.

Many expect the government to start enforcing the crackdown on improperly documented workers by the end of the year, said Fahad al-Turki, head of research at Jadwa Investment Co. in Riyadh, the Saudi capital.

The government crackdown on the millions of improperly documented foreign workers retains the support of al-Turki and other economists. They see the government move as essential to breaking the kingdom’s reliance on cheap foreign labor, and building a private sector capable of providing more Saudis with jobs at liveable wages.

Gulf countries for decades have struggled to do both. Saudi Arabia is combining the crackdown on undocumented foreign labor with a more conventional quota system rewarding employers who hire Saudis.

The crackdown, once it comes for real, “will have a short-term impact, less than six months, or even a year,” but cause no real direct inflationary pressure, al-Turki said.